Sportsbooks in the U.S. got a serious kick in the butt this year when the coronavirus suddenly came in and forced all sports activity to a grinding halt. Not only in the U.S., but around the world, athletic organizations were forced to put everything on hold, and the impact felt by the sports gambling community was fast and brutal. The SBC Digital Summit prepared a couple of panels to discuss how the sports gambling world will change post-COVID-19 and, despite the major drop in activity, there is a silver lining.
One of the panels was designed to discuss how investments and mergers and acquisitions (M & A) will change as a result of the coronavirus. Led by several industry experts from companies like Roar Digital, SeventySix Capital, Drive by DraftKings and more, there is a general feeling that, once the gaming industry begins to recover, there could be a lot of movement in the sports gambling space. This could include entries from players no one has heard of before, looking to topple some of the largest sportsbooks around, or from corroboration between different entities that join forces to make a bigger impact and capture a larger piece of the pie.
Many states had only just launched their sports gambling operations when the global pandemic hit – some literally only had days in the market. Sportsbooks and casino operators spent millions of dollars securing licenses, looking to recuperate their investments from things like the NBA Finals, the NCAA March Madness and the NHL Stanley Cup tournament, all of which would have been wrapping up over the course of the past two months. All three regularly see huge betting activity, and the loss of the money spent on securing sports gambling operations might force some operators out of the business. As a result, consolidation could be coming, and entities may be forced to give up a percentage of their control in order to stay afloat.
With the halt to sports action, sportsbooks suddenly found themselves looking for alternatives for which they could post lines and generate some type of income. It hasn’t been easy, especially in the U.S., as regulations have prevented a lot of potential sources of revenue from being off-limits. That has changed somewhat, though, as was discussed in the second panel on alternatives to sports gambling. SG Digital, DraftKings, Roar Digital, as well as others, were on hand to provide their take on what is happening to keep operations running, and what will be seen going forward.
Virtual sports have stepped in to try to fill the void in the sporting world, but has only barely been able to make a dent. Lending a hand has been eSports, but the implementation of odds for both activities has been suppressed because of state laws. While some states, such as Nevada and New Jersey, have started to relax their regulations and now allow some types of wagers for virtual sports and eSports, there is still a lot that isn’t covered. And, what is covered isn’t seeing the same level of activity that live sports has always enjoyed. Live sports were, are and almost definitely always will be king.
Even after the post-coronavirus recovery begins, there will still be a period of a couple of years before things can start to seem normal. The high number of unemployed people and a shift in priorities will keep some of the money away from the sports gambling market for a while, but, there is a bright side. COVID-19 is going to force sportsbooks to be more innovative and creative, bringing in new options that will appeal to a larger consumer segment. As it stands now, the coronavirus has at least brought greater attention to the activity as people have been forced to stay at home with not much to do.
